Blackwater is in town
The ‘concern’ that the chattering classes are voicing vis-à-vis the growing American presence in Pakistan is little different from the hollow sloganeering of the religious right
By Aasim Sajjad Akhtar
The chattering classes are annoyed at the government’s publicity campaign to mark one year since Asif Zardari took office as president. Zardari’s unpopularity amongst the rich and the famous is legendary and there is little chance that his stint in the presidency will win over the skeptics. Quite unbelievably, one of the elite’s major gripes with Zardari & Co. at the present time is that the latter have surrendered the country’s sovereignty to the Americans (the Islamabad elite has been watching numerous residential properties in sectors like F-8 being occupied by unknown Americans being provided high-level security).

Back in the 90s when People’s Party’s government allowed Independent Power Producers (IPPs), it invited criticism from its opponents. This episode is being repeated by opposing RPPs. Many countries currently are using RPPs to generate power — these include China, Bangladesh, India, Sri Lanka and UAE are some of the names.

The spokesperson of the Ministry for Water and Power says: "This is perhaps the only with time that RPPs would fully establish their credentials as partners in power generation with the government. We should not deny them the opportunity to provide service to public at a low cost. The government has already notified the inauguration schedule for the new power plants so anxieties and worries need to be put to rest."

When PPP came into power in March 2008, Pakistan was passing through the worst electricity crisis. The shortage of 1700MW to 2500 MW crossed 4,000MW in summer with 12 to 16 hours loadshedding across the country. This was countered by fast track projects bringing new IPPs. Although 15 IPPs with a cumulative capacity of 3,050MW have got Letters of Support (LoS) and 12 IPPs with a cumulative capacity of 2,539MW have achieved Financial Close (FC), the earliest commissioning of these IPPs was not expected before mid 2009.

It was in this background that the government decided to explore all possible options to improve power supply. The spokesperson says that the options available to the government were to induct new power plants through (a) public sector (b) IPPs (c) RPPs.

The rental power industry is primarily built around a distributor model, with dealers in local areas providing much of the sales, service and logistic support. Caterpillar and Aggreko are the industry stalwarts, although a number of new players with big plans, and a host of smaller players, are nipping at their heels, including GE Energy Rentals, Cummins Power Rent, Alstom, Kohler, Stewart & Stevenson, and Sunbelt Rentals. These companies’ interest in the rental market indicates that the business is becoming more competition-based.

In 1994 IPPs was a success story. Benazir’s government allowed investors to build and operate IPPs under a tax-free regime. It brought $3 billion investment and added 3,000MW of generation capacity. The subsequent power policies of other government — 1998 and 2002 — were major failures. Only addition to date is 165MW by Attock Generation.

The RPPs are set up to meet short term and emergency requirements of power generation within 4–6 months based on available technology, and have earlier been commissioned in US, UK, India, Bangladesh, Kuwait, Sri Lanka, Turkey, UAE and Suadi Arabia. The concept was introduced in Pakistan in 2007 when GE and PPR from US (150MW and 130MW each) were awarded contracts. Existing system deficit needs quick generation addition capacity.

Fifteen RPPs are being set up in Pakistan that are expected to come online soon. "These have been sanctioned after a transparent process," says the spokesperson.

The tariff issue of RPPs, the spokesperson says, is slightly different from normal IPPs — the latter are based on capacity, return on capital, interest on loans, and repayments, operation and maintenance and other variable cost components.

"The government of Pakistan is not spending Rs200 billion from its fund," says the spokesperson. "Rather, the investment obligation exclusively goes to the investor who obtains finances from market sources and personal assets mobilisation. The government only pays for the services and not for his investments. It is not possible to calculate in totality the investment size of RPPs since external investor’s investment portfolio varies based on the net generation capacity (MW) and the type of machinery (new or used) inducted, clubbed with the project’s actual size & location."

"RPPs, which take 6-8 months to set up, are intended to bridge the demand-supply gap in the immediate short-term. The contract life of these projects is between 3-5 years, after which the government has no obligation to purchase power from these units. Presently, there is a demand-supply gap of about 3,000MW." Prime Minister Yousaf Raza Gilani, in his first address to Parliament last year, stated that 2,200MW of power would be through fast-track, rental power plants. "This figure has not changed."

The comparison between IPPS and RPPs is not fair, says the spokesperson. "It takes two to five years for IPPS to start producing electricity whereas RPPs can start delivering in less than a year. RPPs, being short-term solutions to meet system energy shortfalls, are perforce generally based on used machinery as the lead time for the purchase of new machinery may be anything up to two years. Thus, in order to ensure the availability and performance of RPPs, companies are required to furnish guarantees.

"There is nothing wrong with rental power. The projects are being legitimately processed by PPIB, Pepco and Nepra in a very transparent manner. Rental power suits our requirements and is the only viable option for a short-term solution under the present circumstances. The federal cabinet in its meeting held on August 26, 2009 has approved 2250MW rental projects on fast track basis."

Table 1:

POWER GENERATION ADDITIONS :

RENTAL PLANTS UNDER IMPLEMENTATION

S.No. Name of Project Fuel Capacity (MW) Expected

COD

1 Rental Power Plant, COD

Sumandari Rd,

Faisalabad Oil 150 Jul 2009

2 Rental Power Plant,

Guddu Gas 110 Aug 2009

3 Rental Power Plant,

Sahuwala, Sialkot Oil 150 Nov 2009

4 Rental Power Plant,

Satiana Road,

Faisalabad Oil 200 Nov 2009

5 Pirghaib, Multan Oil 192 Dec 2009

6 Rental Power Plant,

Ludewala, Sargodha Oil 200 Dec 2009

7 Gulf, Eminabad,

Gujranwala Oil 127 Dec 2009

8 Independent, Gojra Oil 221 Dec 2009

9 Reshma, Raiwind,

Lahore Oil 201 Dec 2009

10 Walters, Karachi Oil 205 Dec 2009

11 Karkey, Karachi Oil 200 Nov 2009

12 Total: 1988

Table2:

POWER GENERATION ADDITIONS:

PPIB FAST TRACK / RENTAL PROJECTS

S.No. Name of Project Fuel Capacity (MW) Expected

COD

1 Naudero Gas 51 Nov 2009

2 Karkey Rental Project,

Karachi RFO 249 Nov 2009

3 Walters Rental Project,

Karachi RFO 230 Dec 2009 4 Gulf Rental Project

Eminabad GW Oil 81 Dec 20

5 Independent Rental

Project Gojra

6 Reshma Raiwind

Lahore RFO 201 Dec 2009

7 Total: 1033

Government insists rental power project is the easier and quicker way to end power crisis in Pakistan. Many contradicting voices, however, are being raised about the country’s ability to overcome power shortage without rental power plants.

"It is true we have power shortage in the country but these rental plants are not a viable solution. At present there are at least six power houses in Pakistan which are out of order. New machines need to be installed to make them operational which can be done in months. We can get more than 1500MW electricity by making these power houses operational" a former member power Wapda tells TNS on condition of anonymity.

One such power house, according to him, with a capacity of 350-400MW is situated at Shahdara Lahore. "There are also some power houses which are not producing less than half of their installed capacity like one in Guddu. Its installed capacity in 1200MW but it is not producing more than 400MW. Such power houses can also be upgraded to increase electricity production."

Rental plants are simple cycle plants and consume more fuel than combined cycle power plants which are normally set up as IPPs. "The efficiency level of rental power plants is even less than 40 percent. Our government is being hasty in buying expensive power through furnace oil-based rental power projects." He says Wapda yet has to pay Rs21 billion to PSO for the fuel it bought for IPPs while it has also to pay Rs60 billion to Hubco power and Kapco for the electricity it bought from them.

"During late 1990s we used to fulfil 80 percent of our electricity demands from Hydel resources while the rest of 20 percent was bought from IPPs. But now we will have to buy more than 60 percent of power from IPPs and these rental plants which will result in increasing the country’s annual demand for furnace oil by more than three million tons. This in turn will increase the import bill at least by $1 billion."

Faisal Saleh Hayat, parliamentary leader of PML-Q, was among the first few who opposed rental power plants. He also demanded for a parliamentary commission to investigate reports of alleged corruption in deals with rental power stations. He tells TNS that even the data available at the official websites of Pakistan Electric Power Company (Pepco) and Private Power Infrastructure Board (PPIB) show that Pakistan will be producing around 15,900MW electricity in December this year against a projected peak demand of around 16,064MW in summer 2010.

"In addition to that, Pepco has also announced that it will further add 3,500MW to the national grid by the end of 2009 from the power projects which are supposed to be completed by this period. It means that we would have around 2,000MW extra electricity than our consumption. Why are these expensive power stations being allowed?" he asks.

Economic Coordination Committee (ECC), he says, approved only 1,500MW rental power project against the 2,200MW projects proposed by the Ministry of Water and Power "but the cabinet again approved 2,200 MW projects".

Saleh is of the view that influential power lobby — backed by important government figures including the Federal Minister for Water and Power — created an artificial shortage of electricity by portraying rental power stations as the only answer to the power crisis. "In fact, they did it to get billions of rupees as commissions. Both, the ministry of finance and State Bank pressurised private banks to finance these plants. While some leading banks refused to comply, government authority was used to force agreement from other banks to provide 14 percent advance payment (Rs21 billion) to rental projects against the guarantees given by the government of Pakistan."

This facility was not made public when the PPIB had asked different parties for the letter of interests on these projects. Another move was made to favour the rental power producers by suggesting a deferment of six percent withholding tax and which was also done after the tendering of these projects, Saleh told TNS.

Chairman of Transparency International Pakistan (TI-Pakistan) Syed Adil Gilani tells TNS that on August 7 they requested Wapda, Pakistan Power Resources (PPR), PPIB and Pepco to provide evaluation report of all contracts. "The failure of the Ministry of Water and Power and other government agencies to respond to our request is strengthening the doubts about non-compliance of rules, especially the post-tendering terms of fuel supply guarantee by government of Pakistan which indicate corruption in these agreements." He says the cost of per unit of electricity bought from these rental powers will be Rs23.50.

Pakistan needs an end to the practice of constant experiments and should focus on building democratic institutions.

As the present local government systems complete their tenures in coming November, the future of the present local government system seems uncertain. After an eight-year run of the existing system, we are back to square one with attempts to revert back to the 1979’s system of limited municipal authority at the local levels thus ending whatever little was achieved in terms of decentralisation and devolution with the establishment of 2001 local government system.

It is being argued that the local bodies are incapable of governance and there is rampant corruption and disorder at the local level due to the devolution of authority in 2001, a position that reminds the allegations levelled by each military dictator against the toppled civilian regime in the country. Another major excuse being propagated is that the local government system needs to be wrapped up because it was set up under unrepresentative Pervez Musharraf’s military regime.

It seems the federal and provincial governments wish to revert back to the 1979 local bodies system which was an administrative appendage of the provincial governments with limited municipal authority. Against this, the 2001 local government system empowers district governments with considerable administrative powers over 13 major departments such as education, health, police, revenue etc.

In July, Prime Minister Yousuf Raza Gilani also hinted at the delay in local bodies’ elections saying that elections would be held when the atmosphere across the country would be conducive for them. Afterwards, the government’s Constitutional Reform Committee, headed by Senator Raza Rabbani, announced that the provincial governments would decide about what type of local bodies’ system they want to have in their respective provinces.

Recently, a reported draft of new local government law in Punjab was circulated, which the Punjab government disowns. It seems the provincial government wishes to empower bureaucracy in place of elected local mayors (nazims). If realised, under the proposed new system, a local council will no more remain governance unit, but it would become a municipal administrative unit under the provincial government.

Provincial governments prefer dealing with public servants rather than elected representatives because public servants can be transferred, while an elected district nazim can only be removed through a vote of no-confidence, which may not always be possible. The provincial governments have already reinstated the commissioners, and reinstatement of deputy commissioners and district magistrates is on the cards. Thus, the separation of power of the judiciary from the executive achieved after a three-decade struggle may be reversed.

Major political parties, civil servants belonging to DMG class and nationalists of smaller provinces seem to have unanimity of view in opposing local government’s system. On the other hand, ironically, military regimes and the civil society organisations in the country seem to have been major proponents of the devolution of power to the local level.

The ruling Pakistan People’s Party has a track record of not holding the local elections during its previous tenures in 1971-77, 1988-90 and 1993-97. As a broad-based popular party, the PPP seems to fear that the local body elections would open a Pandora’s box destabilising its government and causing fissures within the party due to conflicting interests of party leadership at the local level.

PPP’s opposition to a powerful local government system is also due to the fact that historically the system has been used by military regimes to erode its political base. In fact, the local bodies’ system in the country has always been initiated by non-representative military regimes — Gen Ayub Khan (Basic Democracy system), Gen Ziaul Haq (1979’s Local Bodies’ Ordinance) and Gen Pervez Musharraf (2001 Local Government Ordinance) as a substitute to parliamentary system at the national and provincial levels.

In establishing some sort of a local system, the military rulers’ main objective was to weaken the existing political parties and consolidate their own power by creating a class of local collaborators that could then be harnessed into a new political party under the establishment’s umbrella. Ayub Khan created the Conventional Muslim League, Ziaul Haq created Pakistan Muslim League (Junejo-Nawaz) and Pervez Musharraf cobbled together another Pakistan Muslim League (Chaudhry Shujaat).

That also explains why the members of provincial and national assemblies loathe the idea of vesting substantial administrative authority in the local governments. The local order tends to eclipse the position members of the parliament in their electoral districts and divert the centre of gravity away from them to mayors (nazims) and councillors. The legislators have traditionally shown the tendency to monopolise the state power at least in their respective constituencies, if not all over the province.

The members of national and provincial assemblies do not hide their desire to act as de-facto appointing authority of all the government officials working at the district level and as a dispenser of public money to the contractors of their choice for public works. It is the issue of monopolising on the state power and public funds which brings members of the assemblies in sharp conflict with local governments because these are the major tools with which the political elite maintain its position by doling out patronage and nurture cronyism while enriching itself side by side.

Similar self-serving considerations are behind the opposition of the District Management Group (DMG) of civil service to the 2001 local government system. Prior to the present local governments, the office of deputy commissioner, mostly filled with a DMG officer, was a repository of the state authority at district level. The 2001 local order abolished the DC’s position and transferred its powers either to elected mayors (nazims) or to respective heads of the administrative departments.

The DMG class lost its glory to other civil services such as the Customs and the Police. Since then, the DMGs have been campaigning and lobbying to regain their lost position. The excuse is that the new system has spawned corruption and caused breakdown of law and order in certain areas as if there were no corruption and ideal conditions of public safety existed prior to the present local order. This stance assumes that the provincial bureaucracy is honest and upright and more service-oriented than the elected mayors in districts and sub-divisions (tehsils or taluqas), something that defies common man’s experience. Instead, for a common man dealing with a corrupt local officer is much more economical and hassle-free than a standoffish officer sitting hundreds of miles away from the countryside in the provincial capital.

The stance of regional/nationalist parties on the powers devolved to local governments is on the basis of their age-old demands of provincial autonomy and rights of the federal units. Ironically, the provincial parties such as Awami National Party (ANP) in smaller provinces that advocate increased autonomy for themselves do not follow the same principle when it comes to devolving powers to the local governments.

However, the provinces are justified at least on the score that they already have little powers as most powers are concentrated in the Centre. It is argued that unless the Centre cedes more subjects/powers to the provinces, even the partial transfer of provincial authority to the local bodies further weaken the provinces’ writ. With the Constitutional Reform Committee, headed by PPP’s Mr Raza Rabbani, finalising its recommendations on increased provincial autonomy and the possibility that the parliament would adopt them through the 18th Amendment, the issue of vesting some powers in the local governments should not be an issue.

The fact is devolution of power has always been a difficult proposition in Pakistan. The vested interest in accumulating powers at the Centre could be one reason behind this and civil-military bureaucracy has been much maligned to work for this objective, but civilian rulers have been equally ambitious to exercise absolute power and establish their authoritarian regime. In the 1950s, Punjabi-Mohajir leadership of the Muslim Leagues did not accept the demands of then East Pakistan for provincial autonomy at the cost of long delay in the framing of first Constitution and subsequent military takeover.

The country’s chequered history is witness to frequent breakdown of political order when majoritarianism overtook the true democratic spirit and civilian authoritarianism created popular demands for extra-constitutional measures. After all, Z A Bhutto’s bid to gain two-thirds majority in the parliament through partially rigged general elections in 1977 gave way to Gen Zia’s martial law and Nawaz Sharif’s attempt at gaining absolute powers paved the way for Gen Musharraf’s regime. The dispersal of the authority through the local governments could be a check on the authoritarian tendency of the civilian rulers.

The local body system in the country may have its roots in military regime, it is also a reality that they are the only political platform for the middle class to participate in the governance. Ayub Khan’s BD system for the first time provided an opportunity to middle class people and small land owners to participate in the governance. With increasing role of money in politics and domination of traditional landed gentry in rural areas, middle class people cannot find a way to national or provincial assemblies.

In the longer term, political parties themselves are the main beneficiary of the devolution of powers to the local level as it creates a political class and stake-holders down to the level of districts, tehsils and villages. It is because of short-sightedness of mainstream political parties and authoritarian tendencies of their leadership that they view local governments as their rivals. If democracy is to prevail and persist in this country, politicians will have to learn to live with the local governments and build mechanism of smooth co-existence. The DMGs can only derail the devolution through a conspiracy with the ruling parties. Once the main parties show firm commitment to the local governments, civil servants are not in a position to achieve their ambitions.

Changes in the present local government order may be considered to make it more accountable and transparent and increase its service delivery, but it needs to be retained because it gives representation and participation to the common citizen at the grassroots more than the previous systems. District government’s control in 13 subjects means that people in a far-flung district do not have to travel to the provincial capital for issues related to these subjects. This system has also created a local service. The positive aspects of the present system also need to be taken into account. Another example is of tehsil municipal administration, which was previously confined to urban areas, but extended to rural areas as well in the present system. Now the rural population is also benefiting from municipal facilities, including water supply, streetlights, etc.

Any plan of cutting back on the financial and administrative authority of the local government institutions, on the excuse of corruption at the local level, would affect service delivery at the grassroots. Limiting local bodies to municipal functions by depriving them of existing administrative powers would make them an appendage to provincial governments. This will frustrate the very purpose of creating local governments. Moreover, any delay in holding the local body elections, whose signs are visible from official statements, may suit one or the other political party’s narrow interests for the time being, but it will interrupt the continuity of democratic process, of which these very parties could be losers in the long run.

In 1966, when I was in school, one of my favourite pastimes was to have a ride on Karachi Circular Railway (KCR). My classmate Javed Iqbal and I would sneak from our homes, buy a 25 paisa ticket and ride on the wonderful train which traversed between Wazir Mansion in Khardar area up to Drigh Road. We made sure that we would not disembark from the train because in that case we had to buy another ticket. There was no ticket checker and we would ride on the train for hours, to and fro.

In those days film Akhri Station of Shabnam and Rahman was drawing huge crowds and we had named KCR after that film.

After a lapse of so many years KCR is again making headlines and 16-million citizens of Karachi are being told that it would be revived. According to newspaper reports the Executive Committee of the National Economic Council has decided to revive KCR as a "modern commuter system" at a cost of Rs 128.5 billion. The committee suggested that the railway tracks along the main lines should be made dual from Karachi City Station to Drigh Road and around 700,000 commuters would be able to travel by it on a daily basis.

Although the investment to revive KCR seems to be huge but given the fact that billions of rupees are being spent on constructing faulty overhead bridges and underpasses that transform into huge ponds during rains, KCR seems to be a rational option. More so because as many as 700,000 passengers would be able to avail the facility daily.

It may not be easy to translate the dream into reality because most of the railway land has been encroached upon on both sides of the tracks and it would be a formidable task to evacuate these people. The ruthlessness with which railways land has been encroached upon could be gauged from the fact that the famous Awami Markaz on Shahrah e Faisal and built by slain Prime Minister Benazir Bhutto with much fanfare is on railway’s land.

The KCR is a public transport facility established for the masses of Karachi in 1964 under the regulation and control of Pakistan Railways with a very low fare and efficient service. KCR was initially built forming a small circle using the main line as the base, taking off on the mainline at Drigh colony instead of Malir Cantt, according to a report prepared by Urban Resource Centre (URC), a non-government organisation headed by noted architect and planner Arif Hasan.

The railway planners initially aimed to use this line as by-pass for freight traffic and accordingly built a big goods train’s yard at Wazir Mansion. The KCR was, however, hardly used for freight traffic and was primarily used as commuter rail system, the report said.

According to a report, the KCR could serve as a better means of transport communication than the prevailing buses and minibus system that pollutes the city a lot less and is a faster and more convenient option. The following facts depict the importance of the KCR, according to the report:

*26 passengers can travel in a minibus, 100 in a double decker, 300 in an air-conditioned light rail bogey and 1800 can travel in a heavy rail. *Expansion rate of the city is from 100-750 sq km (i.e. 7.5 times), and public transport demands have multiplied 12 times.

*5646 public buses ply in the city and about 1700 more buses would be needed in the near future.

KCR is important because it passes through all major working areas of Karachi and also gives coverage to all important residential areas. It is situated at a distance of 1-1/2 kilometres from Schon Circle in Clifton and less than half kilometers from Boat Basin. It is a 5-12 minute walking distance from Pakistan Secretariat, the High Court, the KMC building, the City Court and Passport Office. It runs along I.I. Chundrigar Road and is located less than half a kilometre from Kharadar. It is half a kilometre from the Fish Harbour and about half a kilometre from Lea Market. Pathways to these locations and a shuttle to Lea Market is all that is required because a one-kilometre walk takes no more than 10 minutes, and this is universally accepted as appropriate for linking with a transport system, according to the report.

"There was no logic behind terminating the operations of KCR," Mohammad Nauman, an associate professor at the prestigious NED University of Engineering and Technology told TNS. "It catered to the needs of hundreds of thousands of commuters, especially the working class people who worked at Sindh Industrial Trading Estate (SITE) and industrial areas of Landhi."

He said in the mid-1970s, the country faced a textile crisis and a large number of industrial workers were laid off. Hence the number of passengers commuting through KCR dropped and became an excuse to terminate the services of KCR.

No efforts were made to preserve railway tracks and infrastructure thereafter by Pakistan Railways, government of Sindh and the City District Government Karachi and the vast swathes of land on both sides of the tracks were occupied. Even the Karachi Building Control Authority (KBCA) and cantonment boards allowed construction around the reserved areas on both sides of the tracks. Near Wazir Mansion station one even found wooden planks of railways being openly sold by unscrupulous elements.

"If revived and extended, sub-urban railways running at grade level would also serve the workers of various cottage industrial areas of the city and upcoming industrial areas besides SITE and industrial centres of Landhi already covered by tracks," Nauman said.

He pointed out that it could cater to the needs of North Karachi up to Northern Bypass besides Sohrab Goth and Gulshan-e-Maymar and would serve commuters from North Karachi, New Karachi, Surjani Town etc. He said KCR could be developed along Sharea Faisal in the first phase and up to Education City in city’s suburbs in the second phase.

Obviously KCR would give a boost to economic activity and productivity and save precious time that is lost in commuting in Karachi. "Bus stops should be made at railway stations and could serve as the starting point," Nauman said.

The land prescribed on both sides of the track dates back to colonial era and given the fact that a major chunk of land has been occupied it could be reduced as has been done in Japan, Nauman said.

News reports have it that a container train service between Pakistan and Bangladesh via India is being planned. Pakistan Railway officials and Ministry of Foreign Affairs are reported to be examining the potential of this proposal. As a response to this positive development, the business community in the country landed more in anticipation. Pakistan has also toyed with the idea of linking with Iran, India and China with high performance rail connections. It may also be pointed out that increase in freight trains with competitive advantage to users is the only way forward to revive the declining status of railways. The performance review does not show a promising status in any respect.

The Railways, which was once the most efficient and economical mode of transportation, has reached a near moribund status. For those who spent their entire lives serving this important national department with honesty, professionalism and diligence, it makes a most painful reality to accept. This department offered one of the most useful hardware infrastructures that were inherited during partition. North Western Railways, which became Pakistan Western Railways after partition in 1947, was a profitable enterprise. Spread over 7600 route kilometres, the network effectively connected the major cities, towns and regions of what was then termed as West Pakistan. The management, organisation and controls of the department were largely done on professional lines. Most of the senior officers and engineers had obtained training and experience under the British administration. Civil engineering, signals, traffic and commercial cadres, mechanical and electrical engineers, accounts and finance were the key units on which the railways were structured. A Railway Board was constituted in 1959 which was the highest echelon of management to oversee the performance.

The department was initially run with high levels of efficiency. Adherence to merit, high levels of professionalism, openness to new ideas and approaches and the ability to respond to new challenges enabled Railways to acquire high levels of efficiency in most of its routine functions. Accidents were rare and level of service dependable. The rot that spread and finally infested the railways began during the decade of 1960s. In order to promote road transportation and the role of goods carrier enterprises, the government of the time made deliberate attempts to neglect and discourage the railways. This approach continues to this day without restraint. Countless road development projects with dubious feasibilities are a citation in this respect.

Passengers and goods/freight movement are the two essential ingredients of services delivered by the railways. As per norm, the passenger service is subsidised by the surplus revenue earned through goods/freight transportation. The railways had to operate a sizable number of goods trains to maintain financial balance. According to sources in Railways, more than 40 goods trains (20 up and 20 down) used to operate from Karachi to various destinations during the time period of 1960s to 1980s. In other words, the railway was playing a key role in the transportation of various kinds of raw materials and finished goods thus bolstering economic activities across the country. Towards the end of the 1960s, the government shifted the emphasis to road transportation. This approach acquired greater intensity during the Zia regime. The National Logistics Cell (NLC) obtained a sizable market share in the transportation of goods in a swift manner, thus depriving the Railways from its important source of revenue. The budget deficit began to rise. According to a veteran ex-railway officer, the number of goods/freight trains was reduced by half. For medium and long distances, the goods transportation by railways is found to be at least 10 times cheaper than roads/highways. Consequently, it has a lesser diesel consumption leading to lesser requirements for fuel import. Transportation insurance, safety records and handling were few factors that made Railways a logical choice. However, this logic was brushed aside and the government continued to employ NLC and other options of road transportation for goods. According to a safe estimate, the government has spent over US $1.25 billion in excess during the past 25 years for choosing the road option in place of railways. The frequent wear and tear of roads, dubious award of road transportation contracts, high cost of maintenance of road infrastructure and limited security of cargo were some of the outcomes experimented as a result of this approach. Successive ministers have launched new fast trains without proper feasibilities. Most of these ventures evolved to become financial drags over the period of time. The financial deficit had its impact on all aspects of departmental performance.

Railway stations are the public face of the service. Most of the stations have been found in very dilapidated state. Some of the essential facilities are non-existent. Basic amenities for passenger comfort, safety and facilitation hardware for the routine operation and maintenance are declining in quality. During inspections, the concerned station masters and other staff pointed out towards the shortcomings but follow up process for remedial is either extremely slow or not forthcoming at all. Barring a few major stations, the building facilities are also in run-down conditions. The budget deficit does not allow Railway authorities to undertake any mass-scale facilities/hardware re-vitalisation programme which is urgently required.

Most unfortunately, such loopholes only receive limelight after a major accident happens. One fails to understand the logic of importing locomotives and carriages when factory facilities for both exist in the country with enough potential to serve the prevailing needs.

Revival of Railways must constitute a national policy issue. Massive but targeted reforms are required to lift up the level of performance, credibility and image of the railways. The foremost issue pertains to the political will for extending reforms. Unless a full-scale and objectively directioned approach is developed, cosmetic renderings would hardly yield any results. This aspect is difficult to ascertain as the current regime appears to be inclined to auction railway lands as priority. These lands had been reserved for operational needs of the system at various locations. As land assets are already diminishing, the sell off shall be tantamount to curtailing the scale of railways in the future. This matter needs a public debate and a befitting lobbying response from the civil society to revive the lost interest of the regime in this vital nation-building department. The Railways possess a carriage factory and a locomotive manufacturing facility. They require stocktaking and proper upgradation. In 1970s, several sensible solutions were given by some European consultants for the system. However, no heed was paid to their recommendations. It is disappointing to note that only Khanewal-Lahore sector has the facility of electricity-powered locomotives. In a long span of 58 years of post-partition history, no big leap was achieved in technology. Corruptions, nepotism, declining dependence on institutional procedures and willful neglect of the system by the decision makers have caused enough harm. Adhocism has eclipsed the remaining potential of the department.

The revival of Railways cannot happen without a sound analysis and consequent planning. The Planning Commission of Pakistan may constitute a committee of experts from the country for studying the situation of the sector and proposing remedial. The country cannot afford to delay a holistic revival of railways any further!

It was in a national conference organised by Strengthening Participatory Organisation in Lahore early this year that we first heard Dr Karamat Ali, an economics professor from Multan, giving a pro-people almost Marxist view of the current situation. Coming from the chairman department of Economics, Islamia University Bahawalpur, who had been also been Vice Chancellor Bahauddin Zikria University Multan, it was nothing less than a pleasant surprise. We met the soft-spoken professor then with a request for another detailed meeting. This took place in Lahore recently.

Dr Karamat Ali did his bachelors from Government Emerson College, Multan. He joined Economics Department, University of the Punjab, for masters in 1965 at the time of war. He left in 1971 when the country was again in the grip of war.

Between these two wars, he first stayed at Hostel 2 of the university as a Masters student and then joined the PU as a Research Officer in Social Sciences Research Centre, an autonomous inter-disciplinary research centre run by the university in April 1968. He had a chance to work under Akhtar Hameed Khan who was also vice chancellor of the Punjab University at the time.

He went back to Multan again to work as a lecturer in Government Emerson College in 1971. Later, in 1975, he proceeded to Vanderbilt University in the United States to do his masters in Economics and Sociology and then his PhD.

As an academic, he has held various prestigious administrative and consultative positions. He is the author of two books, both dedicated to the people of this country.

Excerpts of interview follow:

The News on Sunday: What was the atmosphere like in Punjab University when you were studying and later working there as a research officer?

Dr Karamat Ali: There was political activism; students were politically motivated but there was no violence. Difference of opinion was accommodated in debates. It was a time of Cold War between two super powers and most of the students were inclined towards China. I still remember students trying to find literature coming from China, reading it and trying to know about the revolution.

The good thing was that students were reading a lot and not only about their own subject. You can gauge this from the fact that I was the secretary of University’s literary society even though I was a student of economics.

TNS: What was the dominating thought in that atmosphere of political activism? How powerful was the rightwing and where did Jamiat figure?

KA: It was minor even though they were trying to unite and consolidate. Majority of the students was not affiliated with any political party. They were liberal, wanted to know what was happening in the world but also wanted to keep their independent identity. They had independent views.

TNS: What about the faculty? Was it politically motivated as well?

KA: Yes, most of them were. There was a group to which I belonged as well that was left-leaning and inclined towards China. They were of the view that people should get their rights and were against feudalism. Ultimately, most of the students participated against the dictatorship of Ayub and it was not motivated or sponsored by any political party. They did it on their own because they felt the people were suffering and they must do something. One major factor in the downfall of Ayub was the student movement.

Later, the movement gained momentum, the decline of Ayub started and Bhutto came in. The party (PPP) was formed in Lahore and many teachers of the PU thought their views were very close to what Bhutto was saying. They gave him their intellectual input about what they thought the new system should look like. Many students joined him.

If you ask me, many students and teachers gave to Pakistan People’s Party their time, intellectual input and efforts without asking anything in return. I still remember there was a large study circle at Ijazul Hasan’s house in Gulberg and we used to meet there every Tuesday where 25-30 teachers came in every week, discussed issues and invited politicians. This was around 1969/70.

TNS: During the time you were in Punjab University, was the hiring of teachers done in a professional manner?

KA: Yes, in a very professional manner. Everything was fair. The difference of opinion may have been there but I can’t recall that there was ever an issue of bypassing merit being handled by the Academic Staff Association (ASA).

TNS: You have talked about the Ayub era. As an economist, how do you respond to the perception that Ayub’s era was the best insofar as economic growth was concerned?

KA: The problem in economics is there can be many indicators. There is a worthwhile debate on the distinction between by economic development and economic growth. Nobody will deny that it was a high growth era, GNP growth was on average 6-7 percent, per capita income was increasing but inequality was increasing too.

In economic development we don’t just talk about GNP growth or increase in per capita income. We have to see how people are benefiting from that growth. The major difference for me is: growth for whom? Growth for the sake of growth or growth for the benefit of the people?

TNS: So you don’t believe in the trickle-down philosophy?

KA: For how long do you expect the people to wait for trickle-down. In my view, once you start raising people’s expectations by saying that per capita is increasing, they start feeling more deprived than before. Every time I hear the statistics, I feel where is the $800 per capita income. I don’t even have $80 in my pocket. Who has snatched my $720?

Ayub Khan launched a train from Karachi to Peshawar to celebrate the so-called decade of development. The train never reached Peshawar. People were on streets against him and he had to quit power.

So there has to be a combination of policies which leads to growth but which also lead to an equitable distribution of the benefits for majority of the population.

Another remarkable thing according to Ayub was the Green Revolution. There, too, two things happened. For any productive use of technology, the major components are land plus technology plus water. So when tractors and high-yielding variety of seeds and fertilisers came in, their beneficiaries were mainly concentrated in the irrigated areas of Punjab where we had the best irrigation system in Punjab. The rest of the country like East Pakistan, Balochistan and NWFP were deprived of all those benefits. Even within Punjab, small landholders were not able to benefit.

In fact, Pakistan missed out on two things — major structural changes in the educational system and the land distribution system. You will be surprised to know that the first ever national conference in this country was held on education. We went on making policies thereafter.

TNS: What were the lessons of Ayub period?

KA: Two political leaders – Bhutto and Mujib — emerged after Ayub’s period and they were both talking about economic issues. Mujib was talking about regional disparity and Bhutto was talking about disparity among people ("roti kapra aur makan").

TNS: How would you assess Bhutto’s period, politically and economically?

KA: His major strength is that the party is still surviving despite all attempts to dismantle it. He created among the deprived people a sense of identity and self-esteem. I don’t think people were foolish to think that everybody would get roti, kapra and makan from Bhutto. As for the classes who were against Bhutto, they knew that a feudal himself, he will accommodate other feudals and will not hurt their interests. What they were not able to digest was that a layman should come and sit near them on the same sofa. Bhutto gave that sense to people that they were not supposed to sit on the floor. They were equally good human beings. Before Bhutto, no tonga driver would dare to obstruct a car driver but after him, they all stood united against the car owners.

TNS: In the given situation, what is the preferable form of capitalism? How much of nationalisation and how much of privatisation, in your view?

KA: Now everyone has realised that it is not possible to leave everything on market. The recession worldwide has taught us this lesson. Why are the governments trying to intervene? Why do they have to come up with packages to save private enterprises? If market forces operate rightly, we would not be in the middle of another depression after the one in 1930s, after only 70 years.

Market fundamentalism, or the extreme view that market can solve everything came into play during Ronald Reagan and Margaret Thatcher. We have to have a combination of both policies; we have success stories of nationalised projects in the world as well as of private institutions in the world. The question worth asking is: how any of these policies is going to benefit a large number of people.

TNS: Do you think there are some areas which should stay in the public domain?

KA: Yes, of course. Look at education. How can you say education is a commodity? Or, that it is market-oriented — let the people sell it and buy it?

TNS: But there is a quality debate, too?

KA: Yes, there is, but we want good education for maximum number of people. If you make it too expensive and deprive a lot of people by saying that it is quality education, you are paying a heavy cost. Private education should be allowed but we should not let them grow like mushrooms by charging whatever fee, teaching whatsoever and howsoever they want. There should be regulation. Ideally speaking, we should have a uniform education system. The government should provide it and then if the private sector excels in providing that system, it is welcome to do it. But we should not have five educational systems.

On the one hand, the economists are saying that we pay according to the margin of productivity. But has the margin of productivity for higher education been assessed so far? There are statistics that you deprive 300 primary education students by subsidising one university student.

I appreciate there are highest rates of return in education. That is why it has become an industry, probably the third in rank. We need market-oriented education but we also need value-oriented education. If you are a good doctor and not a good human being, it is pointless. You have to be both.

The chattering classes are annoyed at the government’s publicity campaign to mark one year since Asif Zardari took office as president. Zardari’s unpopularity amongst the rich and the famous is legendary and there is little chance that his stint in the presidency will win over the skeptics. Quite unbelievably, one of the elite’s major gripes with Zardari & Co. at the present time is that the latter have surrendered the country’s sovereignty to the Americans (the Islamabad elite has been watching numerous residential properties in sectors like F-8 being occupied by unknown Americans being provided high-level security).

The elite’s rather sudden display of ‘concern’ at American influence in Pakistan is disingenuous, to say the least. As the prime beneficiary of the political-economic system that has prevailed in Pakistan since its inception, the external guarantor of which is none other than the great United States, the elite’s latest drawing-room conversation is little more than hogwash.

Ostensibly, the rousing of patriotic sentiment is due to the growing public presence of Americans in the capital amidst the rumour of a Blackwater ‘invasion’. Islamabad has undoubtedly been transformed from the most laidback and safe into the most secured and dangerous city in the country over the past few months. The chattering classes prefer to forget that during more than 8 years of military dictatorship the seeds were sown for what has come to pass in recent times. They forget that Musharraf and Bush together concocted a disastrous series of initiatives in the region that have culminated in the various crises that beset us today. It is the elite that wanted America to come and clear the region of ‘terrorists’. Now that the proverbial wish has been granted, why are the rich and famous getting cold feet?

It hardly matters whether Blackwater (or Xe or whatever else) is in Pakistan or not. Blackwaters and the like are simply symptoms of a disease that afflicts us, a disease which is carried by parasites that are concerned only with maintaining their power and privilege. The fundamental problem with the Zardari-bashers is that they are not criticising the structure of power that prevails in this country, just the person who apparently enjoys power at the present time. If they are really concerned about growing American influence in Pakistan, they should support some of the struggles that common people are waging against injustice; it is these struggles that will help build a constituency that can genuinely take on imperialism and its lackeys.

An example: On September 10, in the early evening, a swanky double-door pick-up truck of the Anti-Narcotics Force (ANF) made a raid on the katchi abadi, France Colony, in sector F-7 of the federal capital. Gunmen emerged from the vehicle, mercilessly beat some youth in the middle of the road and then shoved a dozen of them into their pick-up, threatening anyone who resisted with gratuitous violence. France Colony faces the Kohsar Police Station yet no one from within the thana emerged while this incident was unfolding. The ANF vehicle sped away, shocked onlookers who had been fearing for their lives unable to move for a few moments after the kidnapping.

Slowly but surely residents of the abadi emerged onto the street and eventually started protesting in front of Kohsar Police Station. Needless to say, the abadi residents thought that the police was in the know and demanded that the local SHO come out and face the crowd. None of the posh residents of the sector came out from their homes to investigate, let alone offer their support. The SHO feigned ignorance. The protests continued for hours and the electronic media arrived on the scene. When it became clear that the abadi residents were resolute in the face of threats and promises alike, the ANF pick-up reappeared, deposited the kidnapped kids — who were black and blue from repeated beatings — and took off.

On the same day, employees of the Railway Carriage Factory in the federal capital held a protest outside their factory gate upon non-payment of wages. When the protestors attempted to block the main road running adjacent to the factory, Islamabad police was called into action. Heavy shelling was followed by firing of live rounds which resulted in at least one very serious injury and two other workers sustaining bullet wounds. A virtual state of anarchy erupted as incensed workers tried to defend themselves. Eventually, 100 workers were arrested and charged with disrupting the public peace and workers retreated to lick their wounds and lament their fate.

To the extent that the chattering classes did take note of these incidents the dominant sentiment was that of contempt. There was no empathy, definitely no sense that the katchi abadi residents or the Railways workers were victims of high-handedness, and instead a consensus that ‘our city really needs to be cleaned up’. Presumably, the Zardari-hating Islamabad elite is not concerned that the abuse of power in non-urban areas must be really acute if such incidents are taking place in Islamabad.

The chattering classes have no problem with anything that happens in Pakistan, let alone America’s domineering influence, except when it affects their own cushy lifestyles. This is why, the Taliban were such a threat, while aerial bombings that kill civilians in Balochistan and Malakand were never, and will never be, a concern. The elite does not frequent thanas and katcheris, the bane of ordinary Pakistanis’ existence. It does not have to deal with standing in lines for atta and pulling children out of school for lack of money.

Ours is a parasitic elite, like those elsewhere in the post-colonial world. An elite that has been groomed in the best colonial tradition, with one foot in the western world and one foot in the walled ghettoes within this country that insulate it from the common hordes. This elite hates Zardari yet loves itself, even though the only difference between the supposed excesses of the much-maligned president and those of the elite is one of degree.

In many ways the ‘concern’ that the chattering classes are voicing vis-à-vis the growing American presence in Pakistan is little different from the hollow sloganeering of the religious right. Both are content to maintain the status quo, worried about how unexpected contradictions in the system will affect them, and convinced that they are the best thing that has ever happened to society. With these constituencies competing for intellectual and moral leadership in the polity, it is no wonder that Blackwater is in town.